September 30, 2020 marks Premier Health’s first year end as a public company and I believe it is an opportune time to share our progress to-date and the growth vectors we see for 2021 and beyond. Fiscal 2020 was a period of many important milestones that we achieved while navigating through unprecedented times and I say with confidence that we surpassed our initial objectives.
FY2020 results and operations
Our financial results for FY2020 have exceeded our initial forecasts. We passed the $20M annual revenues threshold with revenues of $20.7M for the 12 months period (78.5% increase from $11.6M in 2019) which translated in an EBITDA of $2.1M (144% increase from $868,408 in 2019). Our gross margin of 27.5% (22.0% in 2019) was well above our industry target of 25%. These results confirm the operational decisions taken in the course of the year as well as the strategic direction Premier Health is pursuing. As I mentioned in previous communications, the Company’s growth is the result of daily team efforts and the capacity of our organization to adapt quickly and constantly seek improvement. In the last 12 months we repositioned our offering for government requisitions and renewed most of our long term contracts which together provide Premier Health with growth and revenue stability.
But the single most important factor for this performance was the efficiency of our platform. I like to summarize our business as follows: We match a resource with a service requirement in a seamless automated process. Accordingly, in addition to operating with a high degree of efficiency, we can generate important revenue synergies by acquiring conventional agencies to integrate them on our operating platform to optimize both the resources and the service requests sides. The first acquisition we completed in 2018 had annual revenues of $3M at the time of closing and contributed $8.3M to Premier health’s top line in FY2020. We constantly update and improve our platform and we believe this is an important competitive advantage and a key to future growth.
COVID-19 lasting impact on healthcare systems
Media in general have been prone to quantify the heavy toll of what we are all going through. Lock-downs were imposed globally with variations in function of systemic, demographic, and cultural realities, with ensuing massive economic loss and many other negative impacts. But there are always two sides of every phenomenon. From the time governments realized the nature of the situation, information was shared globally on an unprecedented scale and mobilization against a common nemesis resulted in a portfolio of several potential vaccines in a record time. Simply put, the pandemic resulted in a wide-spread data-driven response.
Locally, governments and healthcare systems are using this flow of information to regularly adjust their protocols in a constant iteration process to gain efficiencies in coping with the situation and their respective organizations’ weaknesses. The immediate impact on Premier Health has been to stabilize the demand for personnel at set levels for most locations and to decrease the weekly volatility of personnel placement with these organizations as they implement protocols intended to minimize cross contamination.
As vaccination campaigns are deployed in the course of 2021 and pressure on health systems recedes gradually, decision makers will have to address the different issues exposed by the pandemic and how to cope with a similar situation in the future. We believe that healthcare systems and regulators will embark in a quest for efficiencies and that Premier Health is at the forefront of this movement. By developing and offering technology based solutions that are integrated at multiple stages of healthcare delivery we contribute to enhance the quality and efficiency of existing processes and structures. We believe our corporate strategy is well aligned with the healthcare’s sector long-term trends.
Acquisition of Code Bleu
We completed the acquisition of Code Bleu on November 6. The company is considered as one of the prominent agencies in Quebec and we see this acquisition as fundamental for Premier Health. Based on both Premier Health and Code Bleu’s historical results we forecast that we will reach the $50M annual revenue mark in fiscal 2021, two years earlier than anticipated. Premier Health now has the critical mass and the financial muscle to expend its presence in other geographies.
The ongoing integration process is facilitated by the fact that the company is well managed and well organized. Both organizations are sharing best practices and we expect the resulting entity to produce excellent performance indicators. Code Bleu’s balance sheet and results will start being consolidated in the first fiscal quarter of 2021.
Premier Health’s corporate strategy evolves around three development axes, namely technology, recruitment and acquisitions. Moving forward, Premier Health has a technology development strategy aimed at extending the capabilities of its platform to address different aspect of healthcare services delivery as well as accelerating, facilitating, and automating recruitment.
The management sees acquisitions as one of the preferred growth vectors for the Company for the next five years. The Canadian market is highly fragmented and ripe for consolidation and smaller conventional players have limited access to technologies and difficulties addressing shifting industry dynamics. Without this technology layer it has become very difficult for them to operate proficiently. In that context, smaller organizations that have developed long standing relationships with healthcare personnel and contractual arrangements with healthcare organizations in their respective geographical markets are prime acquisition targets for Premier Health.
With the recent additions to the management team, I am convinced that Premier Health can enter other geographical markets in the near future and continue on its growth path.